WINNIPEG -- The Manitoba government is proposing setting interim rates for Manitoba Hydro and limiting annual rate increases to 2.5 per cent for the next three years.

Crown Services Minister Jeff Wharton and Finance Minister Scott Fielding made the announcement at a news conference on Thursday, noting the province will introduce these legislative amendments this fall.

The province notes that Manitoba Hydro requested a 3.5 per cent increase for this fall; however, the Manitoba government is proposing an increase of 2.5 per cent in 2021, 2022, and 2023. This proposal is subject to approval from the legislative assembly.

“In spite of the huge debt problem at Manitoba Hydro, our government is working to strike an appropriate balance to protect Manitoba ratepayers as we recover post-pandemic and to ensure Hydro is able to meet its financial obligations created by the previous government’s risky decisions,” Fielding said.

The legislative assembly will approve the interim rates until the Public Utilities Board (PUB) approves rates for the first multi-year period.

According to the provincial government, the proposed 2.5 per cent increase each December is 25 per cent lower than the average annual rate increase over the past decade. It said this is the lowest rate increase since 2011-2012, noting that it will result in an average residential annual increase of $35.

The province will introduce these rate increases as amendments to Bill 35: The Public Utilities Ratepayer Protection and Regulatory Reform Act. It said this act would reduce regulatory costs paid by ratepayers by about $40 million by switching to multi-year general rate applications.

“The title says it all, ‘Ratepayer Protection,’ and that’s really the focal point of that bill and our moves here,” Fielding said.

The ministers said Bill 35 would give the Public Utilities Board (PUB) the power to review any contracts or projects worth more than $200 million.

Under the new regulatory framework, Manitoba Hydro would have to submit a multi-year general rate application to the PUB for establishing electricity, including an integrated resource plan with a 10-year load forecast and the development of any major facilities in the next 20 years.

“This period will allow the PUB to become stronger and more independent while ensuring ratepayers of greater transparency for the future,” Wharton said.

Adrien Sala, the NDP critic for Manitoba Hydro, said he is disappointed and concerned about a rate increase without a review from the PUB.

“This is really concerning because a lot of Manitobans are facing huge affordability challenges right now, especially seniors and families on fixed incomes, so it’s not a great time to be raising costs on the regular Manitobans in this province,” Sala said.

He noted if this is approved it will be the second time the province has raised hydro rates within a year through some form of legislation.

“This is totally unprecedented; to go around the PUB, and essentially this government is asking Manitobans to trust them, to trust that this rate increase is actually required and Manitobans aren’t prepared to extend that trust anymore,” he said.

“The Public Utilities Board plays an important role in protecting us from overpaying for electricity and this government perceives them as an obstacle through their ability to raise rates and that should be a huge concern to all Manitobans.”

He said the province should have sent a rate request to the PUB, which allows experts to determine if a rate increase was necessary. From there, he said, the rate increase could be set.

“Manitobans won’t have that benefit because the PC government wants to set Hydro rates at the cabinet table and that’s a huge concern for regular Manitobans who should be really worried about overpaying for their hydro rates,” Sala said.

Sala said hydro rate increases have a huge financial impact on Manitoba families, saying that now is not the time to be adding to their economic challenges.

In a statement, Dougald Lamont, Leader of Manitoba’s Liberal Party, described Thursday’s announcement as a “blatant declaration of corruption,” saying that the province is “abusing their power” and putting the financial future of Manitoba Hydro at risk in hopes of gaining political popularity.

He said it should be the PUB setting Manitoba Hydro’s rates.

“The actual price the PCs have picked has nothing to do with Hydro’s future needs,” Lamont said.

“Why do we even have a Public Utilities Board, or an independent board for Hydro, when the PCs are just running it from the cabinet table?”

Lamont added that this is a “political and financial disaster in the making” for both Hydro and Manitoba, and that the province should leave the PUB intact.